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spending

One of the numerous legislative deadlines that Congress will be forced to confront this session is the expiration of the 8th short-term extension of the 2005 surface transportation authorization law (SAFETEA-LU). With federal transportation spending growing beyond its revenue source, an imbalance between donor and recipient states, inefficient and superfluous construction projects popping up all over the country, and burdensome mass transit mandates on states, it is time to inject some federalism into transportation spending.

Throughout the presidential campaign, many of the candidates have expressed broad views of state’s rights, while decrying the expansion of the federal government. In doing so, some of the candidates have expressed the conviction that states have the right to implement tyranny or pick winners and losers, as long as the federal government stays out of it. Romneycare and state subsidies for green energy are good examples. The reality is that states don’t have rights; they certainly don’t have the power to impose tyranny on citizens by forcing them to buy health insurance or regulating the water in their toilet bowels – to name a few. They do, however, reserve powers under our federalist system of governance to implement legitimate functions of government. A quintessential example of such a legitimate power is control over transportation and infrastructure spending.

The Highway Trust Fund was established in 1956 to fund the Interstate Highway System (IHS). The fund, which is administered by the DOT’s Federal Highway Administration, has been purveyed by the federal gasoline tax, which now stands at 18.4 cents per gallon (24.4 for diesel fuel). Beginning in 1983, Congress began siphoning off some of the gas tax revenue for the great liberal sacred cow; the urban mass transit system. Today, mass transit receives $10.2 billion in annual appropriations, accounting for a whopping 20% of transportation spending. Additionally, the DOT mandates that states use as much as 10% of their funding for all sorts of local pork projects, such as bike paths and roadside flowers.

As a result of the inefficiencies and wasteful mandates of our top-down approach to transportation spending, trust fund outlays have exceeded its revenue source by an average of $12 billion per year, even though the IHS – the catalyst for the gasoline tax – has been completed for 20 years. In 2008, the phantom trust fund was bailed out with $35 billion in general revenue, and has been running a deficit for the past few years. Congress has not passed a 6-year reauthorization bill since 2005, relying on a slew of short-term extensions, the last of which is scheduled to expire on March 31.

Short-term funding is no way to plan for long-term infrastructure projects. In their alacrity to gobble up the short-term money before it runs out, state and local governments tend to use the funds on small time and indivisible projects, such as incessant road repaving, instead of better planned long-term projects.

It’s time for a long-term solution, one which will inject much-needed federalism and free-market solutions into our inefficient and expensive transportation policy.

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A group calling themselves “Citizens for a Progressive Whitley County” have purchased an ad promoting all of the benefits of the proposed industrial wind turbine facility.

We suspect that this ad wasn’t “paid for by hundreds of concerned citizens” as it claims…anybody smell astroturf?

And, while we’re on the subject…the numbers quoted in the ad don’t add up.

When the effect of many people leaving an undesirable place to live, and no one moving into an industrial wind turbine facility…the schools could end up losing Federal funding which is based on student population.

All of the estimates of income are most likely based on the turbines operating at full capacity, and that Whitley County doesn’t have enough wind to drive these turbines at full capacity.

Even if Whitley County had a constant 30 mph wind speed, the energy produced isn’t always needed on the grid…remember that there can be no storage of this electricity. It must be consumed at the time of generation. That means that if the grid doesn’t need the power, the turbines will be OFF, generating $0.00 in revenue.

I guess ‘progressive’ would be a good word for this “group”…Our current ‘progressive’ Administration constantly uses fuzzy math to come up with numbers that just don’t add up. And the best they can come up with when is didn’t work is “it would have been worse”.

The US Government has blown TRILLIONS of dollars out of our economy with their fuzzy math…do we really need more fuzzy math right here in Whitley County?

Civitas, an independent think tank, recently published a report by British economist Ruth Lea — director of the manufacturing renewal project at Civitas and an economic adviser to the Arbuthnot Banking Group – that concludes the expense of wind farms and need for backup energy makes harvesting wind “inordinately expensive and ineffective at cutting emissions.”

According to the U.K.’s Climate Change Act, signed in 2008, greenhouse gas emission goals set a 20 percent reduction by 2020 compared to 1990 levels and an 80 percent cut by 2050. Such drastic reductions fundamentally change the way many businesses operate and require adoption of renewable energy or carbon-cutting technology. Since generation of electricity alone accounted for nearly a third of the U.K.’s CO2 emissions in 2010, according to the report, this is clearly an area where the government is seeking to make improvements.

The Telegraph reports that the U.K. plans to build as many as 32,000 wind turbines in the next two decades. This initiative is part of a goal set by EU’s Renewables Directive to have 15 percent of the energy produced in the U.K. come from renewables by 2020.

The Civitas report states that while wind power looks like a competitive option for alternative energy, additional costs associated are not being considered and may in fact negate the carbon-saving benefits:

The costing of wind-power electricity generation is clearly very complex. But one conclusion can safely be drawn and that is that wind-power is expensive – especially offshore. Under these circumstances it seems unwise to be embarking on a huge programme of investment in wind generated electricity, especially when the country is facing grave economic challenges. This analysis also ignores the perceived environmental costs of wind-power, especially onshore wind turbines.

According to the report, Lea finds that the expense of maintaining backup forms of energy for periods of unreliable wind power could mean that “energy users pay twice: once for the window-dressing of renewables, and again for the fossil fuels that the energy sector continues to rely on.”

The Telegraph reports that skeptics of this research consider evidence in the report “outdated and inaccurate.” According to The Telegraph, Dr. Gordon Edge, director of policy at the lobby group RenewableUK, said the information in the report was developed by “anti-wind cranks” and went on to explain that wind power is meant to supplement existing fossil fuels not replace it all together.

Although Edge considers the data evaluated by Lea as outdated, most of her analysis is based on the U.K.’s Department of Energy and Climate Change 2010 report on electricity generation costs of the major technologies, which includes wind turbines, nuclear, and use of traditional fossil fuels with carbon capture and storage.

This table from the Civitas report evaluates costs of different energy producing technologies in the near term.

Lea also makes note of a 2011 BBC report that states in periods of intense cold, when coal- and gas-fired power stations are relied upon the most, analysis of the weather has shown little to no wind available to generate power.

The Civitas report also points out that work published by the Dutch physicist C. le Pair in October 2011 that found even on “normal windy days” in the Netherlands use of wind turbines actually increased fossil fuel consumption and therefore increased CO2 emissions. It should be noted that this research was published on le Pair’s website and has not been peer reviewed, according to The Guardian. The Guardian states this is not to say the research should be discounted, but that it should be vetted by other experts in the field before holding to this claim.

The Huffington Post UK reports that a spokesperson for the DECC said that the department acknowledges some of the upfront costs associated with wind turbines, which it is working to reduce, but still considers wind power is still a viable source of energy now.

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If your nearest stop sign is looking a little worse for the wear, you should reach out and let your local government know. Up until recently, that sign was one of the hundreds of thousands that were set to be replaced by 2018, according to a mandate formerly on the books. Now, however, the Obama administration is getting rid of that rule so that local governments can decide if and when a sign needs to replaced.

According to U.S. Transportation Secretary Ray LaHood, and representatives from nearly all 50 states, the mandated 2018 sign swapping would’ve cost millions of dollars that didn’t need to be spent. Local governments can better determine when a sign needs to be changed, and it makes more sense for the move to be handled this way then by a random point in the future. It also saves everyone a lot of dough.

The state of Minnesota would need to spend anywhere from $55 to $75 million to hit the 2018 deadline, for example. Delaware would fork over $60 million, while the New York City on its own would spend millions of dollars and require 12 to 16 years just to complete the project. That would put the city while behind the 2018 deadline.

The federal government heard the cries, and it’s listened. 46 of the proposed deadlines have been eliminated. 12, however are remaining active because they are deemed crucial to public safety. Examples of this important intersections include railroad crossings without flashing lights and one-way signs wherever necessary.

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House Republicans have united around a proposal to tie sizeable spending cuts and major budget reforms to any increase to the debt ceiling. The plan, known as “Cut, Cap, and Balance,” originated in the Republican Study Committee, and has gradually made its way to the forefront of the GOP’s intraparty discussions on the debt limit. At a closed-door conference meeting Friday morning, Republican leaders resolved to vote on — and pass — the plan next week on the House floor. Its chances for success in the Senate are close to nil, but Republicans intend to present it as the type of plan that can pass the House, and also as a serious proposal that House Republicans have put forward in the absence of Democratic leadership.

“All year long, we’ve led on the big issues that are facing the country,” said House Speaker John Boehner (R., Ohio) at a press conference Friday, citing the House-passed Paul Ryan budget as a key example. “We’re in the fourth quarter here. Time and again Republicans have offered serious proposals to cut spending and address these issues, and I think it’s time for the Democrats to get serious as well.”

Under the “Cut, Cap, and Balance” legislation, Congress would raise the debt ceiling by $2.5 trillion (the amount requested by President Obama to get him through the 2012 election). However, that increase would go into effect only if both houses of Congress pass — with two-thirds majorities — a balanced-budget amendment (BBA) to the Constitution and send it to the states for ratification. In addition, the plan calls for significant spending cuts to next year’s budget — about $111 billion — and firm caps on federal spending at 18.5 percent of GDP by the end of the decade. According to White House data, given current trends, spending will exceed 25 percent of GDP this year and will hover around 22.5 percent for the next five years. (The legislation will make no immediate changes to Medicare, Medicaid, or Social Security.)

In particular, House Republicans have been increasingly vocal about their desire for a BBA in the past several days, including in a slew of op-eds from party leaders and a number of press conferences on Capitol Hill. The House had planned to vote on a BBA next week, but that has been postponed to allow for the consideration of “Cut, Cap, and Balance,” and to give party leaders more time to try to pin down the 50-plus Democratic votes they’ll need to pass a BBA.

Rep. Steve Womack (R., Ark.) tells National Review Online that Friday’s meeting “served to galvanize” the GOP caucus. “We’ve had a few internal conflicts among ourselves this year with the [continuing resolution] and other issues,” he said. “But I’m going to be very surprised if I don’t see a significant majority of the people sitting in that room get behind this plan.”

Proponents believe the plan is strong enough to convince some, if not all, Republicans who have said they won’t support a debt increase under any circumstances to sign on. Raising the debt ceiling, says Rep. Jeff Flake (R., Ariz.), a prominent fiscal hawk, would be “a bitter pill for us to swallow.” “Cut, Cap, and Balance,” he argues, is the best available option. “First of all, it’s good policy, it does the right thing,” he says. “And secondly, on the politics side, we’re back on offense. It puts it squarely in the president’s court, he can follow or not.”

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We were told that the more money our rulers frivolously wasted on pork projects, the lower unemployment would be. To the surprise of no one who keeps his head outside his colon, “stimulus” spending has had the exact opposite effect. Via Investors.com:

Don’t expect the New York Times et al. to figure out any time soon that sucking all the money and credit out of the economy and flushing it down the drain doesn’t put businesses in a position to hire. If they were capable of learning, FDR’s extension of the Great Depression would have taught them all they need to know on this topic.

Then again, it’s possible that they did learn from FDR. Maybe our ruling class doesn’t consist of idiots; maybe they are doing this on purpose. “The worse the better,” 1960s radicals used to say, meaning that they could not replace the most efficient economic system in the history of the world (capitalism) with one repeatedly proven not to work (socialism) until people had been made miserable.

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The Keynesian policy of trying to increase total i.e. “aggregate” demand – either by having government spend, or by cutting taxes just to leave more money in people’s pockets in hopes that they’ll spend – to revive the economy, never works. The latest installment of Keynesian failure is the payroll tax cut.

Predictably, like its predecessors, this “stimulus,” which aimed at putting money in people’s pockets, failed. The economy was unmoved, and indeed appears now to be slowing again, as today’s bleak jobs report underscores.

This wasn’t the first time Keynesian stimulus failed to stimulate. Let’s recall that Keynesianism failed to revive the economy from the Great Depression, during which government spending increased throughout the 30s, yet unemployment remained in double-digits; it failed in 2001 when President Bush attempted to stimulate the economy out of recession by putting money in people’s pockets through a series of tax rebates; it failed under President Bush a second time in 2008, when government spent hundreds of billions of dollars; then it failed in 2009 under President Obama, after we spent the largest sum of money in the name of Keynesianism – some $800 billion – in order to revive the economy. The one thing you can say for Keynesian stimulus is that it is bi-partisan – it fails for Republicans as effectively as it does for Democrats.

A battle is raging within the conservative movement on Capitol Hill whether to shoot at the flag stick or lay up (in golf terms). The battle is between the Balanced Budget Amendment (BBA) versus a statutory spending cap bill. Both factions have good points.

The bold, shoot-at-the-flag-stick faction of the movement wants to push for a BBA strategy or bust. This strategy includes taking the debt limit increase hostage for the demand of a BBA passing both the House and the Senate.

Another other faction of the movement is pushing for a law that would set a statutory cap over the next 10 years, limiting the spending of the federal government to about 20.6 percent of the economic output of the United States’ economy. This strategy would settle for an amendment in the form of a spending cap to the debt limit increase as a price for passing an increased debt limit.

Today, I wrote at Human Events that Senator Mike Lee (R–UT) is rounding up support for the idea that the price of increasing the debt limit is passage of the BBA by both the House and the Senate.

Senate conservatives are working to pass a Balanced Budget Amendment (BBA) as part of the debate over a debt-limit increase. According to Politico, Sen. Mike Lee (R.-Utah) is circulating a letter to other senators asking them to join his pledge to “oppose any attempt to raise the debt ceiling” until a BBA is passed by both houses. Lee has been joined by Republican Senators Rand Paul (Ky.), Jim DeMint (S.C.), Jim Risch (Idaho), Marco Rubio (Fla.), Jim Inhofe (Okla.), and Richard Shelby (Ala.).

Robert Costa over at NRO interviewed Senator Lee on the strategy, and Lee said the following:

I would like to see a scenario in which Republicans in both houses draw a line in the sand. If Democrats do not give us the supermajorities we need in both houses to pass the balanced-budget amendment, we are not going to even come to the table. It is a condition precedent. We are always hearing the Left, from the political establishment, that it would be catastrophic if we do not raise the debt limit. I don’t mean to minimize the significance of that happening; it would create a lot of uncertainty and a lot of fear. But we have to remember that there are at least equal corresponding risks of raising it without putting anything else in place.

The Commitment to American Prosperity Act, or CAP Act (S. 245), was introduced by Senators Bob Corker (R–TN) and Claire McCaskill (D–MO) as a means to cap spending as a percentage of America’s gross domestic product. I write in Human Events that the CAP Act is being viewed as a safe landing place for those who want to cap spending but fear that a BBA is a bridge to far, because it would take a two-thirds vote of the House and Senate to pass a change to the Constitution in the form of the BBA.

Some conservatives worry that a bipartisan plan to cap spending … may undermine efforts to pass a BBA this year. The CAP Act would start in Fiscal Year 2013, capping spending at 25% of the gross domestic product, then ratchet down spending caps over the years 2014 through 2022. This isn’t enough for some conservative senators, who note that spending caps have proven ineffective. Furthermore, some complain that the CAP Act sets spending levels too high, and doesn’t even cap spending for the next fiscal year.

The CAP Act reduces total federal spending—discretionary and mandatory spending combined—to a target of approximately 20.6 percent of gross domestic product (GDP), the historical average of federal spending. Beginning in 2013, the CAP Act will establish federal spending limits that will be gradually reduced over 10 years to 20.6 percent.

Some conservatives demand fundamental constitutional reform, because statutory spending limits are too easy to waive and change. This debate will play out over the next few weeks approaching Secretary of the Treasury Tim Geithner’s declared deadline of August 2 for passage of a debt limit increase. It will be interesting to see if the House and Senate decide to throw in all their chips for a bold strategy or an incremental strategy to cut the size and scope of the federal government.

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In Washington, Democrats and Republicans are engaged in a slow-motion showdown over the budget. Republicans want to close the deficit by cutting spending–although, to be fair, their proposals so far are modest at best–while the Democrats don’t want to close the deficit at all. If pressed, the Dems’ preferred course is to raise taxes.

Republicans should gain courage from these findings by Scott Rasmussen. Interestingly, this is an “all adults” poll as opposed to likely voters:

A new Rasmussen Reports national telephone survey of American Adults shows that just 20% of Adults would be willing to pay higher taxes to help reduce the federal budget deficit. Seventy-one percent (71%) would not be willing to do so.

This is because an overwhelming majority believe that the problem is excessive spending, not insufficient taxation:

At the same time, … 83% of Americans say the size of the federal budget deficit is due more to the unwillingness of politicians to cut government spending than to the reluctance of taxpayers to pay more in taxes.

The Republicans need to keep hammering away on the theme that the federal government must reduce its debt, and should do so by cutting spending. They are winning that argument with the American people.

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George Santayana is oft-quoted for his statement “Those who cannot remember the past are condemned to repeat it”. It seems that those in the Obama administration are serial abusers of this violation. If for some reason you doubted this, look no farther than this political cartoon from 1934:

Read the sign in the lower left closely. Sound familiar?

There is some question as to whether this is authentic. If it’s not, the Chicago Tribune was also fooled…the original can be found on the Chicago Tribune web site. A couple of my colleagues also tell me that this has been floating around for a while, but I guess I lead a sheltered life – it’s the first time I’ve seen it. Since classics never go out of style, you should “enjoy” it again.

As one of my online friends reminds me – this is evidence that the battle between left and right has been raging for decades. The “political pendulum” has swung back and forth several times since 1934, and I suspect it isn’t going to stop. It is on the verge of swinging back to the right in 2010 and 2012, and one would think that the actions of the Obamites would have put a stop to “the swing”.

But it won’t stop swinging, because no one listens to George Santayana.

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I know no safe depository of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of constitutional power.— Thomas Jefferson, letter to William Charles Jarvis, September 28, 1820